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THE BETA TRADE COLLAPSES

17 August 2009 by Cullen Roche 4 Comments

Don’t let that 1.75% decline in the Dow fool you – the underlying internals of this sell-off are extraordinarily destructive.  A full reversal of the beta trade appears to be in effect.  As we mentioned a few weeks back, the momentum junkys are running for cover and smart money investors are reaching for downside protection:

beta

Cullen Roche

Cullen Roche

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Comments
  • JD Swampfox

    Looks like a buy the Dow and sell the NASDAQ might be a pretty safe trade…

    08/17/2009 at 10:59 AM
  • Cullen Roche TPC

    The rotation into healthcare and consumer staples is strong today. All the usual Dow suspects are performing well. I’d rather be in cash than own PG, JNJ, KO or WMT. We’d probably be down another 0.25-0.5% on the S&P if not for the healthcare announcement….

    08/17/2009 at 11:04 AM
  • James

    I like that term…momentum junkies. What makes you so sure Ben and Goldman won’t decide to buy a little and squeeze the shorts that may be pouncing right now? I think that is a scary reality since it has happened countless times in these past five months…

    08/17/2009 at 12:02 PM
  • prescient11

    Momos will not give up the upside trade yet. Be careful here…

    08/17/2009 at 6:44 PM